Ecuadoran litigants challenging Southern District Judge Lewis Kaplan’s preliminary injunction against worldwide enforcement of an $18 billion environmental judgment against Chevron in Ecuador got a measure of procedural relief at the U.S. Court of Appeals for the Second Circuit yesterday (See Order).
A three-judge panel stayed part of the March 7 injunction that tied the hands of the so-called Lago Agrio Ecuadoran litigants and granted an expedited appeal for their counsel, James Tyrrell of Patton Boggs, who is asking the circuit to vacate the injunction barring plaintiffs from suing in any jurisdiction to secure the judgment.
Judge Kaplan issued his injunction on the grounds that Chevron was likely to prevail at trial on its racketeering claim that the judgment was procured by fraud and the corruption of the Ecuadoran judicial system. He also ruled that the oil company would suffer irreparable harm if subjected to a series of attachments.
By alleging racketeering, Chevron’s attorney, Randy Mastro of Gibson Dunn & Crutcher, turned some of the victorious Lago Agrio plaintiffs into defendants, and Judge Kaplan granted Mr. Mastro’s request for an expedited trial in November.
Yesterday, Second Circuit Judges Rosemary Pooler, Ralph K. Winter and Barrington Parker refused to stay that part of the injunction blocking enforcement actions, but the panel did stay the portion that blocked Mr. Tyrrell and the prevailing Lago Agrio plaintiffs from raising funds to launch the enforcement actions or discuss legal strategy.
Oral arguments by Mr. Tyrrell and Mr. Mastro over the stay were heard by the Second Circuit panel on Tuesday (NYLJ, May 11). A briefing schedule set forth in the court’s order yesterday points to oral argument before a merits panel in late July or early August. Under the order, Mr. Tyrrell is free to renew his quest for a complete stay of Judge Kaplan’s injunction before the merits panel.